More On Legal & Compliancefrom The Advisor's Professional Library
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
- Using Solicitors to Attract Clients Rule 206(4)-3 under the Investment Advisors Act establishes requirements governing cash payments to solicitors. The rule permits payment of cash referral fees to individuals and companies recommending clients to an RIA, but requires four conditions are first satisfied.
It's no secret that the current state of CFP Continuing Education (CE) credit is a pretty sorry affair.
Financial planners attend sessions just hoping for one or two takeaways that they haven't heard a dozen times before—an embarrassingly low bar for "satisfaction"—and conferences struggle to draw attendees. It often seems that planners choose a myriad of free vendor-provided CE options not because the content is good—often, it's still little more than a veiled sales pitch for the company's products or services—but because the paid CE alternatives from conferences aren't much better. If you go into your CE experience assuming you won't hear anything new anyway, there's little reason not to take the free option. And this situation is not new; while the CFP Board has become more aggressive about cracking down on the worst of the CE-as-product-pitch options, there's been little done to elevate the average CE experience.
Yet that doesn't mean the situation is hopeless, as many steps can be taken to improve the quality of CFP continuing education. In fact, the CFP Board, as the keeper of the CFP marks and the continuing education for them, wields a great deal of power to change the system for the better.
For instance, the CFP Board could create a ratings clearinghouse so conference organizers can more easily see who's a good speaker and who's not, allowing events to better screen their speakers before putting them on the podium. In addition, the CFP Board could also provide a better database for finding CFP CE providers in the first place, so the majority of events don't have to rely upon random Google searches and scanning the agendas of other conferences! But perhaps the best path to getting better CE credit is simply to lift the number of required CE credits, creating more of a potential CE market that could attract quality providers in the first place!
Ratings Clearinghouse for Speakers (and Content)
One of the fundamental problems for elevating the quality of CFP continuing education is that a good educational experience relies on the speaker as much as the content... yet while the CFP Board at least lightly reviews and vets content before approval, there is no system to vet the speakers. And even after a speaker presents, there is no system to capture the quality of the speaker's presentation (or the content itself) for other organizations to draw upon; while many/most events do circulate evaluation forms, the results are only ever seen by the event organizers and perhaps the speakers themselves. The information never becomes a resource for other events to find the best speakers, and avoid the worst ones; at best, events that find good speakers just keep asking them back, and events who find bad speakers don't invite them again (without doing anything to ensure the bad speaker doesn't just go and speak for another organization instead).
So what's the solution? If the CFP Board truly wants to elevate the quality of continuing education, it should function as a ratings clearinghouse for speakers and their content (an approach I've actually advocated for many years, and wrote about on this blog in 2011 when the CFP Board proposed changes to the CFP Ethics instructor requirements).
Develop a standardized series of questions that events are expected to use as a part of their existing evaluation process. The questions wouldn't need to be very plentiful nor very complex; ultimately they just need to cover the basics the speaker's presentation skills, the relevance of the topic, the quality of the presentation materials —all rated on a 1-to-5 or 1-to-10 scale—and perhaps a question about whether the speaker refrained from selling his/her products or services. Tabulated results could be reported back to the CFP Board, or even just the average scores in each category.
CFP Board could make the submission of evaluation forms mandatory for CFP CE approval—to ensure that it's done—or even just "encourage" organizations by providing easy-to-use templates, and perhaps offering them a small discount off the cost of their applications for CE credits or their CE sponsor renewal form. Alternatively, the CFP Board could leverage available technology by sending surveys directly out to event participants when their CFP CE credit is being reported, and require the participants to complete the survey to receive their credit (although ultimately I suspect it's better to just gather the results through the events themselves, which often— or should—utilize evaluation forms anyway).
Notably, this wouldn't actually put the CFP Board in the business of rating speakers; instead, it would simply rely on a "crowdsourcing" effort where speakers are rated over time by the audiences that see them, which ultimately lets the CFP Board gather FAR more information on speakers than could be determined from a standalone vetting process, anyway. Benchmarking results could be provided to show how the speaker's content and ratings compare to the average speaker on that topic or in that category, or to speakers overall. The CFP Board could also tabulate results for speakers across multiple topics, as well as the scores for standalone presentations.
Simply put, there's no reason that conference organizers should have to rely on a speaker's marketing materials and anecdotal evidence—or no evidence at all—of the quality of a speaker, especially when the CFP Board already tabulates so much information about each and every session that's presented for CFP CE credit (and who the participants are). If we want more quality speakers and fewer bad ones, let's use the reporting systems and resources that are already available to shine some transparency on the speaker selection process!
The second step the CFP Board could take to improve the quality of CFP continuing education is to craft a (better) resource list of available speakers and continuing education providers. Technically, the CFP Board does currently have a "Find A CE Program" resource on its website, allowing CFPs to try to search out CE providers. However, the organization of the database is clunky at best; although you can screen for online or self-study content as a CFP certification looking for CE, there's no way to screen for—or even see who—the speaker is, as the resources are all organized by the sponsoring CE organization. And given that many/most speakers have their sessions registered by a conference or event organizer, or a large firm/organization, often there's not even a way to track down the speaker if you wanted to. And of course, as noted earlier, even if you do find a speaker, there's still no information on whether the speaker was any good or not, given the aforementioned lack of ratings.
So what would an improved system look like? First of all, every session submitted for CE should include the name of the speaker - ideally with a registered speaker ID number to help with the collation of speaker scores - in addition to the sponsor/provider. There should be an option to search by provider, or speaker, or session. In addition, every session submitted should be tied to the CFP Board's own Principal Topics List (or multiple topics under one presentation), so that conference organizers or CFP certificants themselves can more easily search for CE that's relevant to their needs, without needing to guess the right keyword (since not every presentation title uses the same keywords for sometimes similar content).
Notably, the FPA actually tried a version of this in the past, and created the FPA Speaker's Directory. However, the end result is an interminably long PDF document that's not searchable, cumbersome if not impossible to use, and of course doesn't contain any speaker ratings even from the speakers that deliver sessions to the FPA's own chapters!
The ultimate goal of this process—if a conference organizer wants a speaker on a particular topic, like behavioral finance, they should be able to simply go to the CFP Board's website, do a search for behavioral finance (or whatever other topic), and see every speaker who's ever delivered a session on that topic for a CFP certificant audience, along with the aggregated audience results of the speaker for that and any other presentations. New speakers will start out speaking at smaller organizations (who may not always wish to get or be able to afford the best from the speaker database), but any presentation to CFP certificants will get the speaker into the database and the potential for more visibility based on the quality of the speaker's reviews/results.
In the end, the best speakers can rise to the top, and the worst can fall to the bottom... simply by creating a system that uses the information the CFP Board already collects, and evaluations that already occur, to make it easier to separate the wheat from the chaff!
In the second part of our post, we’ll reveal the single most important step to improving CFP CE providers and content in the long run.